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DOW is following same pattern as during the Great Depression

Discussion in 'Economics and Financials' started by padre31, Jul 6, 2010.

  1. padre31

    padre31 Premium Member Luxury Box

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    http://www.cnbc.com/id/38092759


    No surprise, but I suspect a few things working behind the scenes will once again rob the taxpayer to prop up Wall Street (think Federal Reserve actions via subsidiary banks)

    Now unto a really depressing chart for those unemployed:

    [​IMG]

    Recessions typically last 18 months from trough to peak meaning in about 18 months on average the US economy rebounds...not this time if anything things are diving lower in the job market:

    http://www.nber.org/cycles/recessions.html
     
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  2. my 2 cents

    my 2 cents Well-Known Member

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    No surprise.....people are a companies biggest and greatest asset generally...why invest in a large cost yet elastic asset ..........for the privilege of compressing your gross to net? Add to that you now or soon will have to pay for higher legal cost, higher employee withholding's, higher taxes and what looks like mandated healthcare at whatever the government wants to charge....on top of not really knowing what kooky idea to generate revenue will be next from the nutjobs in DC..............................
     
  3. padre31

    padre31 Premium Member Luxury Box

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    Exactly, with the death of the American consumer, *gosh* we now have to produce things the Global Market will purchase, we have oil in the Gulf, better stop drilling that'll help create economic growth..head..meet..wall.

    All of the uncertainty that the Federal Govt is injecting into the economy via taxes, regulations, and mandates, is simply killing job creation.
     
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  4. 2socks

    2socks Rebuilding Since 1973

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    this can NOT simply be true:wink2:.......The Obama administration announced today that they have "single handedly created or "SAVED" 2.5 million jobs:evil:
     
  5. BigDogsHunt

    BigDogsHunt Enough talk...prove it!

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    :lol::lol::lol: nice 2socks...nice...:lol::lol::lol:
     
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  6. padre31

    padre31 Premium Member Luxury Box

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    Alright, now whilst I agree with the sentiment ("THE EMPEROR HAS NO CLOTHES!") this is the economics and financial forum.

    In that sense, fmr Director OMB (office of management and budget) under Bill Clinton was hired, and Peter Orszag fired/resigned, and Clinton was brought into a Business Roundtable meeting to allay concerns(along with Warren Buffet who supposedly brokered the Clinton/Obama thaw), meanwhile the US Chamber of Commerce, of whom I have nothing good to say, had a same day meeting and publicly bashed Obama's Economic Policies.
     
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  7. 2socks

    2socks Rebuilding Since 1973

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    http://news.yahoo.com/s/ap/us_white...DeW5fdG9wX3N0b3JpZXMEc2xrA25ld3docmVwb3J0Yw--

    "I did not have sexual relations with that economy......no I mean women"

    ??? I wonder what they talked about......maybe a balanced budget? First I cut here with my hatchet....I mean scalpel..................::wink2:
     
  8. padre31

    padre31 Premium Member Luxury Box

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    Well, from what I understand B Clinton was there to reassure the Business Roundtable that current policy and policy makers were not hostile to business.

    The problem is, the 4x Tax Bomb that is coming in 2011, without an extension economic activities will slow further no matter what was said in the meeting
     
  9. padre31

    padre31 Premium Member Luxury Box

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    and the Dow plunged 200 pts today.

    The problem is, with the trading curbs in place, and other .Gov interventions into the Stock Market, pressure upwards is allowable, pressure downwards is not.

    Beware the Sucker Rally..:D
     
  10. jim1

    jim1 New Member

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    Damn straight, good post. A secondary wave up from 6500 to about 20% off the 14,000 top in 2007 matches post 1929 and the next wave down might be brutal. There is no such thing as a jobless recovery.
     
  11. TheMageGandalf

    TheMageGandalf Senior Member

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    Problem is we wont get jobs back if whatever big/medium size companies that are still here insist on making the same profits as before by cutting jobs.

    They now feel like they can force those who are still working into doing the job of 2-3 people. They know that they can force them to do it because that person, out of fear of becoming unemployed, wont say no.

    These companies also know if they DO say no, they can fire that person and get one desperate one that will take less pay and do the work of 2-3 people.

    So less employees, somewhat same work. Same profits in the here and now. Fluff news to investors about profits.

    They dont see how they are destroying the economy that way.

    It seems like the only ones that dont seem to see the light at the end of the tunnel is actually a freight train coming our way are the rich, which will keep getting richer at least until it all blows up like it did in the GD.
     
  12. TheMageGandalf

    TheMageGandalf Senior Member

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    Here's an article thats a good example of what I am saying:

    http://finance.yahoo.com/news/United-Technologies-to-cut-apf-1557758016.html?x=0

    Notice these things:

    "will cut another 1,500 this year and next on top of the 900 positions it has already eliminated in 2010, the company said Monday"

    "The company also raised its profit expectations."

    "moving manufacturing to low-cost sites."

    "Shares rose 49 cents, to $71.38 in afternoon trading."

    Soooo....cut 1,500 MORE jobs so your shares can rise 49 cents.

    Forget about the 1,500 LIVES affected. Just so long as you get yours and your shares rise 49 freaking cents.

    Gordon Gekko people. Gordon Gekko.
     
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  13. my 2 cents

    my 2 cents Well-Known Member

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    Here is the other option if you are unwilling to meet global competition .....

    1. you can go out if business and people can now buy their products cheaper from Ni hao Products in which case, unless you commute to Bejing every day then you are out of work.

    2. you can compress your margins in which case investors will not invest and you will go out of business a bit slower and can have some time to prepare for a life of the eternal PB&J, unemployment checks and free government payed health insurance until you reach the age you can draw from the unfunded social security program that probably will not exist by the time you reach said age.

    3. You can choose to maintain your margins and move your company operationally to somewhere where people do not habla but will work for less, there is less tax implications, less employee costs, less regulatory costs and investors can actually get a return that is acceptable and offsets the taxation rape about to occur here.......in which case Joe American loses their job, but Chin Wei Wukfaless will be gamefully employed.

    4. You can raise your prices and see what happens to your market share and profits when you are not competitive.............

    or god forbid you choose to meet global competition and

    4. We could choose to lower taxes, lower operating costs, lower regulation in order to offset the growing employee benefit costs and maintain your Gross to net margin differential....to date the average Joe wearing red white and blue has not been willing to do that.

    We in the USA have such high costs and they are currently accelerating that if you are going to exist AT ALL as a business owner then you have to react to global competition.......to say you are a bad owner or bad business because you cut your costs in response to the economic situation and economic environment without a whole lot more situational analysis is just wrong IMO.... a business exists to make money...if you tax more or make them pay higher costs then you will either A...pay more at the pump so to speak or you will B....deal with the ramifications of cost cutting.......why is a business who's purpose is to create shareholder wealth the bad guy when they move away from an economic and business environment that hampers the creation of said shareholder wealth?.......sounds more like a simple philosophy that in general business is just bad...as an observation of the post only.


    If we do not want businesses to cut costs then we should buy higher cost American Products, do not support Walmart's liberal use of imminent domain laws, support lower taxes, support capping of frivolous lawsuits, support consistency of environmental regulation, and a whole bunch of other pro business solutions that other countries have embraced that create a dynamic economic environment......IMHO only of course.......

    We all hate it that people lose their jobs but business responding to an economic environment in order to meet their obligations to shareholders is not the problem. Maybe we should consider creating an economic environment conducive to keeping 1,600 jobs here and companies profitable for the long term....
     
  14. padre31

    padre31 Premium Member Luxury Box

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    Yep, which is why the middle class is disappearing, which creates the paradox of A)reducing standard of living B)take on mtns of debt to obtain a degree that one can "hope" lands one a above median income to pay back the debts.

    Globalism is basically subsidization of International Business via forswearing tariffs and supporting domestic industries via public policy.

    Now the thing to ask oneself when "competition" is trotted out, is "who wins and at what cost"?

    Right now the loser is millions of blue collar jobs in the US, the winner is Global Corporations who have -0- allegiance to America.
     
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  15. my 2 cents

    my 2 cents Well-Known Member

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    It ain't what we like and it ain't fantasy land but it is what it is....and I agree with your post..... I would however call duties and AD duties "reverse subsidization" since it is easier on the semantically correct that hate the T(ax) word..
     
  16. vt_dolfan

    vt_dolfan Season Ticket Holder Club Member

    I think we are just in for a shock....as to what the new reality is. If there is no sub prime credit....we wont be a consumer driven economy. If its more expensive to hire new workers...and US business have actually become better and more productive at what they do....there is little incentive for them to rehire the numbers they let go.

    We dug ourselves to big a hole.....Im very afraid of that. I dont see anything any party can do to fix our economy......our economy is gonna have to fix itself, and its gonna take alot of time. Maybe quite a few years as we adjust to not being a consumer driven economy.
     
  17. Stringer Bell

    Stringer Bell Post Hard, Post Often Club Member

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    We will always be a consumer driven economy, unless American's decide to start working for $3/hr
     
  18. vt_dolfan

    vt_dolfan Season Ticket Holder Club Member

    Of this I dont doubt.

    Heres the 10,000,000 dollar question. How can we stay a consumer driven economy without freeing up credit standards. And if we end up freeing up credit standards....arent we making the same mistakes all over again?

    It takes a few years to repair your credit from the 500's to the 700's....with 30% (and growing I believe) of American consumers at Sub Prime credit standards....how the hell can we increase demand by purchasing goods. Everyone is holding on to their few extra dollars. In 2007 the median "real" household income for the US was $50,000. Id be suprised if it were that high now. But even at that...after paying bills...rent, etc....$50,000 doesnt go a long ways for a family, and it sure doesnt add up to alot of "fun money".

    Can we recover with ultra tight credit standards? Maybe, but it is going to take a long time, IMO.
     
  19. TheMageGandalf

    TheMageGandalf Senior Member

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    No.
     
  20. padre31

    padre31 Premium Member Luxury Box

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    Thought this would be a timely bump up to the top
     

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